wall street closed this Wednesday in red and the Dow Jones Industrialsits main indicator, fell 0.88% ending the month with losses, when investors fear that the central bank’s plan to continue raising interest rates to control inflation could lead to a recession.
At the close of operations in the NYSEthe Dow Jones subtracted 280.44 points, to 31,510.43 integers, while the selective S&P 500 fell 0.78% or 31.16 units, to 3,955.00 points.
On the other hand, the composite index of the nasdaq marketwhich brings together the main technology companies, fell by 0.56% or 66.93 integers, to 11,816.20 units.
For the month, the Dow ended August down 4.1%, while the S&P and Nasdaq posted monthly losses of 4.2% and 4.6%, respectively.
What started out as a strong month for the three major averages ended in red after the stock’s mid-August spike in gains began to decline. The biggest drop was seen after the chairman of the Federal Reserve (Fed), Jerome Powellsaid last Friday that the central bank should continue to raise interest rates and keep them at a higher level until inflation is under control.
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“Those are the unfortunate costs of reduce inflation. But failure to restore price stability would mean much greater pain,” he added. However, some investors believed that inflation had already peaked and that the Fed would slow its rate hikes.
“The question now is how much pain will the Fed inflict and how long it will take to bring inflation down. The market is trying to find a balance,” said Quincy Krosby, chief global strategist at LPL Financial, in statements collected by The Wall Street Journal.
Fed officials raised interest rates by 0.75 percentage point at each of their last two meetings, most recently in July, to a range between 2.25% and 2.5%.
At its late-September meeting, the Fed is expected to raise rates further, though whether it will do so by 0.5 percentage point or 0.75 point is unknown. Investors this week are keeping an eye on data on the health of the US labor market to guess which path the Fed will take.
“The August (employment) report is important; if wage pressures ease and there are fewer vacancies, that could be a positive catalyst for stocks,” Krosby added.
At today’s close, the 11 sectors were dyed red and the biggest losses were for raw materials (-1.21%) and non-essential goods (-1.05%).
Among the 30 listed companies in the Dow Jones, red also dominated and the losses of Salesforce (-2.22%), Merck & Co (-1.75%) and American Express (-1.72).
In addition, the fall of Bed Bath & Beyond (-21.58%) stood out, after the American chain of home products stores announced this Wednesday that it is going to close 150 establishments and cut 20% of its workforce, among other measures to try to stabilize your financial situation.
In other markets, Texas oil closed today at $89.55 a barrel, and at the close of Wall Street the yield on the ten-year US Treasury bond rose to 3.179%, gold fell to $1,721.50 an ounce and The dollar fell against the euro, with an exchange rate of 1.0047.
